Contractor strikes gold by building for ‘green’ industry

A greenhouse in Pueblo, Colorado, is one of the marijuana industry projects taken on by Your Green Contractor, a Denver-based firm started after Colorado legalized recreational marijuana in 2012. (Courtesy of Nathan Mendel)

If Oregon building contractors don’t take on “green” building for the marijuana industry, they may be missing out on big business, says Nathan Mendel, founder and president of Your Green Contractor, based in Denver.

Mendel has been in construction for a long time and has worked on hundreds of projects over the years, first working for his uncle for seven years at Mendel-Allison Construction, where he started as a carpenter and worked his way up to director of special projects. He specialized in building housing for the elderly, assisted-living facilities, and medical, multifamily and retail projects. After his uncle retired in 1997, Mendel began his own construction firm, Mendel and Co., and became a general commercial contractor. He has built more than 700 projects, specializing in dental offices, but also restaurants, commercial kitchens and dance studios.

The focus of his company changed in 2011 – a year before Colorado voters approved recreational marijuana in 2012 – after an unusual opportunity came his way. Mendel got a call from an architect he had frequently worked with, who asked him to expand a grow facility for a medical marijuana dispensary. It was something Mendel knew nothing about at the time.

“I had no experience with cannabis prior to 2011, and when I first went to the grow facility, they had just harvested that morning,” he said. “I literally walked across their plants. And when I got to the other end I asked the owner why we were walking on the plants, and he explained that the buds had already been harvested. I thought you smoked the leaves.”

After that initial remodel of the grow facility, Mendel formed Your Green Contractor, and now cannabis-related construction accounts for 50 percent of his business, he said.

Mendel has become an expert all kinds of marijuana-related construction, and specializes in building out, remodeling and upgrading custom marijuana-infused-product kitchens, extraction facilities, dispensaries, greenhouses and warehouses.

The company covers the entire state of Colorado and is expanding to other states.

“Our last niche was in the medical dental world and we built dental offices around Washington state for years,” he said. “We are licensed in several states because of that and are continuing to get licenses as marijuana becomes legal.”

Voice of experience

But Mendel is not only building, he’s giving advice on how to get into marijuana-related construction. TheYour Green Contractor website, with the motto “We build. You grow,” offers a link to a white paper on how to evaluate a building for a grow facility. The paper covers topics that include power supplies, roof systems and structure, water lines, drainage, security, fire sprinklers, and American Disability Act accessibility.

Nathan Mendel

According to the company website, the single biggest line item in terms of potential cost of a grow facility is upgrading primary power coming into the building..

“Indoor facilities use, on average, eight times more power than a typical warehouse usage,” the website states.

Your Green Contractor also has expertise in permitting processes and builds relationships with local fire, building and utility authorities “to ensure that plans meet code requirements and the review process is streamlined,” the website states.

Many people are skittish about getting into cannabis-related construction because marijuana is still considered an illegal drug under federal law, of which Mendel is well aware. His solution is to go by the book, and follow local and state regulations and requirements to the letter.

“You have to be absolutely in compliance with every local and state law,” he said. “Everyone knows you’re (potentially) breaking federal law, but we are not growing or touching the product, and it’s absolutely essential to be in total compliance with every other law.”

Mendel’s decision to get into cannabis-related construction “absolutely raised eyebrows,” he said, but he hasn’t had any backlash.

“Inevitably, people are curious about marijuana,” Mendel said, and he’s found people are more curious than they are interested in expressing pro or con opinions.

Money Matters

Handling financing is another issue of going into the marijuana building business. Most traditional lending institutions have shied away, or in the case of MBank, tried to get into the field but then backed out.

“There’s a couple of different ways to handle financing,” Mendel said. “Many clients pay us in cash and we also have clients that pay from a personal checking account. Others might have a business account or a holding company, until the bank finds out and shuts them down.”

Mendel’s company also works with clients on warranty issues and will help them develop a long-term maintenance plan for equipment.

An eye for opportunity

Mendel said he doesn’t know of any Oregon-based contractors who may be planning on getting into building for the cannabis industry. However, he said has had conversations with another contractor who is already licensed in all 50 states and has expressed interest in doing business in Oregon.

Your Green Contractor is licensed in Colorado, Massachusetts, Nevada and Washington state; Mendel said he’s currently taking a 16-hour tutorial to get licensed in Oregon.

A dispensary in Denver is one of the marijuana-related structures built by Your Green Contractor. The company also builds marijuana-infused-product kitchens, extraction facilities, greenhouses and warehouses. (Courtesy of Nathan Mendel)

Karla Holland, spokeswoman for the Portland Associated General Contractors, said she put out feelers to see if any local contractors were thinking about getting into the field of building for the marijuana industry, but did not get any responses.

Mendel said he’s sure there are competitors out there, but he just doesn’t know who they are.

“There aren’t a lot of people out there waving their hands in the air,” he said. “We’re not building every facility that gets built, so I’m not sure they are as open as we are about it.”

Although no Portland-area contractors appear to be advertising to tap into the future of building for the future recreational marijuana industry, Lela Shay of Portland-based Sorensen Handyman & Construction LLC said the company recently did a remodel for a medical marijuana dispensary, but it’s not the focus of Sorensen’s business.

“They were a client he took care of like any other,” Shay said. “(Company owner Dwayne Sorensen) doesn’t specialize in remodeling for growers or dispensaries, but covers all aspects of remodeling and repair projects regardless of size or project type. He’s a true handyman that way.”

But interest in building for the marijuana trade is increasing Mendel said, judging from the number of trade show being held throughout the country.

“We’re coming up on a dozen (marijuana business trade shows he attended) in the last couple of years, but they’re more and more prevalent, so now we have to pick and choose because there are too many right now,” Mendel said. “We were just at one that was a marijuana investors’ summit in Denver and there are two more in June within a week. We will only go to one of those two.”

Your Green Contractor is not just about getting clients, Mendel said. He recently hosted about 15 building and fire officials from Nevada and Illinois who toured local grow houses, where they learned what to expect from marijuana operations, how to inspect them and implications for fire departments.

Mendel’s company also takes pride in the success of its clients. One of Your Green Contractor’s projects, the Green Man dispensary in south Denver, won the High Times Medical Cannabis Cup twice and was a three-time winner of the Colorado Cup. Mendel’s company did full exterior and interior renovations to turn a formal dental clinic in the dispensary.

“Your Green Contractor employs about 25 people, and business development director Michelle Koster also works with local municipalities on permitting issues.

Moving to marijuana construction was an easy transition, Mendel said, since his company was accustomed to building technically complex facilities.

He did have one surprise, though. When he started working on facilities for the marijuana, he said he assumed at first that all growers and dealers were “stoners” who smoked a lot of recreational pot. However, he found the opposite to be true.

“What I found most fascinating is that nine out of 10 people I meet have some other reason for getting into the business” he said. “They might have started growing to help a sick father, or had a horrific back injury due to a ski accident and tried marijuana as a last resort. It worked so well, that was their impetus.

“Almost everyone has a story, but almost no stoners. They are few and far between.”